| Please spend sometime reading up on Enron before saying this. As it has been pointed out Enron's book was clean. The problem was mainly due to "Revenue Recognition" [1] and valuations. It basically describes when a revenue can be added on to the books. Enron booked it's revenue as soon as deal was booked. So, if they got 100 million deal for next 5 years, they should be booking 20 million each year. What they were doing was to show 100 million as revenue for this year. This is not a single entry as many people believed rather a series of credit and debits which always balanced. The amazing thing is blockchain, specially things like Monero or Zercoin, makes it even more difficult to spot this as Enron would have been able to open accounts as they wanted. I am writing a piece on blockchain transactions and I still don't understand how this triple account thing applies. Let me explain how double accounting works - You and I have 100 in Bank A. The Bank A notes: Bank's Liability to:
You - 100 Me - 100 Total - 200 Asset for: You - 100 Me - 100 Total - 200 When I pay you 50 out of it, the book shifts: Bank's Liability to : You - 150 Me - 50 Total - 200 Asset for: You - 150 Me - 50 Total - 200 Both side in balance. Now this book is obviously internal. Can you use this same example and explain how triple accounting works in blockchain? [1]: https://www.investopedia.com/terms/r/revenuerecognition.asp |
And because governments really don't want to admit to their constituents how much they really spend and what they spend it on, the rules are ... less than perfect.
But a blockchain can vouch for the fact that the ledger was made according to the (supposed to be published and fair) rules, and that the rules didn't change except with total agreement.
So enron would have been able to book things in against the rules, but an easily written automated program would have detected such shenanigans, and there would not be anything Enron could do to prevent that program from raising red flags when the transactions don't follow the rules (so it would not be possible to book in such transactions, then not book in payment in full when it's due. If you're wondering how that's possible, consider that in bitcoin there just isn't any credit. So the only way to place an order using a bitcoin directly is to stake they money ahead of time, optionally with an instruction that it'd be paid back if an "oracle" (anyone else on the blockchain) says it's not delivered correctly)